Answer:
2020 net income overstatement $5,000
2021 net income understatement $5,000
Explanation:
The lower of cost and net realizable method of valuing inventory is used in valuing closing inventory where cost is invoice and NRV is the estimated selling price less cost to sell
Product Cost selling price cost to sell NR unit value
X $37 $48 $15 $33 $33
The inventory should have been valued at $33 not at $38
This means that inventory in 2020 was overstated by $5,000 ($38-$33)*1000)), costs of good sold in year 2020 was understated by $5,000 hence net income was overstated by $5,000
The spillover effect in year 2021 is the reverse of 2020,hence understatement of net income by $5,000
Answer:
3.1781
Explanation:
here you go. I hope thats correct.
Answer:
Products Selling price Unit variable cost Contribution per unit
$ $ $
M 7 3 4
N 6 2 4
O 6 3 3
19 8 11
Break-even point in composite units
= <u>Total fixed cost</u>
Contribution per unit
= <u>$340,000</u>
$11
= 30,909 units
Break-even point for the current sales mix
M 3/6 x 30,909 units = 15,455 units
N 1/6 x 30,909 units = 5,151 units
O 2/6 x 30,909 units = 10,303 units
Explanation:
In this case, we need to calculate contribution per unit of each product by deducting the unit variable cost of each product from their respective selling prices. Then, we will obtain the break-even point in composite units by dividing the total fixed cost by overall contribution per unit.
Then, we will determine the break-even point for the current sales mix by multiplying the proportion of each product in the sales mix by the break-even point in composite units.
Answer:
The first two solutions are attached in the excel document.
The answer and procedures of the exercise are attached in a microsoft excel document.
Explanation:
Solution 3:
Amount at which purchase on February 1 be recorded if the net method were used = $9,100*90%*97% = $7,944
